The benchmark equity indices have rallied to near record highs this week on the back of solid corporate earnings, better-than-expected retail sales performance, and optimism over some economic data. However, the expected monetary policy tightening, and historically high inflation, are catalysts of market volatility. But the shares of Canadian Natural Resources (NYSE:CNQ), Signet Jewelers (NYSE:SIG), and Covenant Logistics (CVLG) have achieved significant momentum of late, which they are expected to maintain, dodging the market’s fluctuations. Thus, we think these stocks could be solid bets now. So, please read on.The benchmark indices rallied on Tuesday, supported by better-than-expected third-quarter earnings in the retail sector and impressive retail sales data. The S&P 500 gained 0.53% to reach 4,707.90, close to its all-time high, while the Dow gained 133 points. The S&P 500 has gained 25% so far this year.
However, Goldman Sachs Group Inc. (NYSE:GS) analysts expect the benchmarks to cool off late this year, rising by a modest 9% through year’s end 2022 due to decelerating economic growth and the cessation of fed monetary support. The equity benchmarks’ record rally amid expectations of tightening fed policy and inflation is raising concerns about market volatility. So, in this environment, we think it might be wise to bet on stocks that have gained momentum and have the potential to maintain it irrespective of market conditions.
Investors' interest in momentum stocks is evidenced by the SPDR Russell 1000 Momentum Focus ETF’s (NYSE:ONEO) 32.1% gains over the past year, and 5.4% returns over the past month. Shares of Canadian Natural Resources Limited (CNQ), Signet Jewelers Limited (SIG), and Covenant Logistics Group, Inc. (CVLG) have gained significant momentum lately, which they have the potential to maintain, dodging the market’s volatility. Thus, we think these stocks could be solid additions to one’s portfolio for the rest of the year.